They can make or break a candidate. But do backdoor deals between Democrats and Republicans turn the debates into a charade?

FARAH: The consequence is the debate ends up being reduced to a series of memorized sound bites with disauthentic answers being proposed to predictable questions. It's a glorified bipartisan press conference.

BRANCACCIO: And which candidate makes the better case for protecting America?

POWERS: I think we're back to an idea of the protective male after September 11th. I mean basically the visceral argument is there are terrorists out there who want to kill you. I will protect you...

BRANCACCIO: John Powers with Michel Martin.

And a costly war, a sea of red ink, and now tax cuts?

PETERSON: I wonder if at some level people in their gut don't understand that this is kind of an economic fiscal Disneyland and it ain't really true.

BRANCACCIO: Peter Peterson of the Blackstone Group.

ANNOUNCER: All that tonight on NOW with Bill Moyers and David Brancaccio, the weekly newsmagazine from PBS.

ANNOUNCER: From our studios in New York, David Brancaccio and Bill Moyers.

BRANCACCIO: Welcome to NOW. There are an awful lot of voters out there who say they're going to wait to make up their mind until after the candidates debate.

They'll get their chance Thursday night. President Bush and Senator Kerry will meet at the University of Miami for their first debate. The thing is, even the form of these debates is debatable.

MOYERS: Which brings me, David, to a book I read years ago that changed the way I see the world. The title is THE IMAGE and in it the historian Daniel Boorstin argued that so much is being staged and scripted in American life that we are losing touch with reality. He described it as the triumph of pseudo-events  counterfeit happenings, fabrications, replacing what's real with illusions of truth.

I think of Daniel Boorstin every four years on the eve of the presidential debates. These debates have become exactly what he found so deeply troubling  the packaging of politicians and politics to create a phony transcendence that simulates democracy while subverting it.

Here's our report, produced by our colleague Peter Meryash.

MOYERS: They've been dubbed the Super Bowl of politics. At no other time during a campaign do so many millions of Americans focus on the choice before them. Debates can make or break a candidate.

John Kennedy said he wouldn't have won the presidency in 1960 if he had not debated Richard Nixon.

Jimmy Carter said he won in 1976 because of his debates with Gerald Ford and then, Carter says, he lost in 1980 because of his debate with Ronald Reagan.

When Carter squared off with Reagan, sixty percent of American TV households were watching. But over the past quarter century, there's been a big change. During Gore versus Bush four years ago, less than thirty percent of TV households tuned in.

George Farah thinks he knows what's happening.

FARAH: When you have stultified debates that produce scripted sound bites rather than authentic discussion, the American people are gonna turn off their television sets.

MOYERS: Farah founded a nonpartisan organization called Open Debates. He says Americans are not getting the presidential debates we deserve.

FARAH: The American people want to hear and see popular candidates discuss the important issues in an unscripted manner. That's what's at stake. Whether or not we're gonna have the right to witness an important conversation.

MOYERS: And why aren't we getting that kind of discussion between the candidates now?

FARAH: Because the Commission on Presidential Debates secretly submits to the Republican and the Democratic candidates and allows these candidates to sanitize the debate format, excludes popular voices, avoid discussing critical issues.

MOYERS: Farah has written a book laying out his case. It's been endorsed across the political spectrum from the conservative patriarch Paul Weyrich of the Heritage Foundation to the Texas populist Jim Hightower.

What unites them in outrage is the Commission on Presidential Debates, the official sounding, supposedly nonpartisan sponsor.

Don't be fooled, says Farah.

FARAH: The Commission on Presidential Debates, although it claims to be a nonpartisan organization, was created by the Republican and Democratic parties for the Republican and Democratic parties. By design, it was established to submit and conceal the wishes and demands of the Democratic/Republican nominees.

MOYERS: The result, he says, is an event tightly controlled by the candidates, a glorified press conference with rules rigged to serve the candidates, not the public.

Listen to moderator Jim Lehrer as he opened the 2000 debate between George W. Bush and Al Gore:

LEHRER [10/3/00]: Tonight, we'll have the candidates at podiums. No answer to a question can exceed two minutes. The candidates under their rules may not question each other directly.

MOYERS: Those were the rules the candidates demanded. For a reason.

MOYERS: You say that what makes these debates so valuable to voters  confrontation, spontaneity, audience size  terrifies the candidates. Why?

FARAH: Because if the candidates were forced to be confrontational, if the candidates were forced to engage in spontaneous discourse, if the candidates were forced to confront issues they were uncomfortable with, they might make a mistake.

MOYERS: That's just what happened to the first President Bush back in 1992, during the town hall debate with challengers Ross Perot and Bill Clinton.

AUDIENCE QUESTION: How has the national debt personally affected each of your lives? And if it hasn't, how can you honestly find a cure for the economic problems of the common people if you have no experience in what's ailing them?

BUSH: I think the national debt affects everybody.

AUDIENCE QUESTION: You personally.

BUSH: Obviously it has a lot to do with interest rates.

SIMPSON: She's saying, "you personally."

AUDIENCE QUESTION: You, on a personal basis, how has it affected you?

SIMPSON: Has it affected you personally?

FARAH: The President was very flustered with the question. He didn't know how to handle it. What do you mean affect me?

AUDIENCE QUESTION: What I'm saying is…

BUSH: I'm not sure I get... Help me with the question and I'll try to answer it.

FARAH: Well, this revealed much to the public that he had a very difficult time relating to everyday working people and how they are affected possibly by the budget deficit. And it's precisely because of that that the candidates decided afterwards for the next two election cycles and in this election cycle to manipulate and sanitize the town hall format.

MOYERS: The candidates got their way.

LEHRER: The audience participants are bound by the following rule. They shall not ask follow-up questions or otherwise participate in the extended discussion. And the questioner's microphone will be turned off after he or she completes asking the question.

MOYERS: What's more, town hall questions would have to be submitted in advance.

FARAH: They had every member in the town hall audience write their questions on index cards and give them to Jim Lehrer.

He would point to the individual and have him ask the question. The consequence, of course, was no matter how good a person Jim Lehrer is, he's still asking all the questions.

The audience members are just there as props. He's still picking the ones to be asked. So it shows the sanitization of the town hall format, showed the evolution of how the candidates are increasingly controlling whatever they can control to avoid mistakes.

MOYERS: Let's go back to the second debate in 2000. You say that was probably the most agreeable Presidential debate in history.

BUSH: Yeah, I agree.

GORE: I agree with that. The Governor and I agree.

BUSH: I think the administration did the right thing.

GORE: I agree with that.

LEHRER: You have a different view of that?

BUSH: No, I don't really.

MOYERS: Gore and Bush agreed to send more money on anti-ballistic missiles, on mandatory testing in schools.

GORE: I agree with Governor Bush that we should have new accountability. Testing of students…

MOYERS: On training Colombian troops for the drug war.

BUSH: You know, I supported the administration in Colombia.

MOYERS: They agreed that we should prevent gays from being allowed to marry.

BUSH: A marriage should be between a man and a woman.

LEHRER: Vice President Gore?

GORE: I agree with that.

MOYERS: They agreed to sign a racial profiling law, to bail out Mexico with IMF loans.

LEHRER: Is there any difference?

GORE: I haven't heard a big difference in the last few exchanges.

BUSH: Well I think it's hard to tell…

MOYERS: And later on in that debate, Bush said…

BUSH: It seems like we're having a great love fest tonight.

MOYERS: "We're having a great love fest right now." You remember that?

FARAH: Absolutely I remember that. The point of the Presidential debate is to highlight the differences in authentic discussion for the American people. And when you have a debate like you see in 2000 with a moderator posing very simple questions and with the candidates agreeing on those questions and actually not being able to address each other, you end up with 37 percent of the answers and the candidates agreeing with each other.

And when Bush said we're having a great love fest it doesn't just relate to the fact that on the various issues they're agreeing on, it also relates to the fact that they're not even confronting each other in debate. It should be a more confrontational process with Candidate A saying, "I disagree with that point. I challenge that point." And in 2000 when Gore tried to challenge President Bush and tried to raise a question to President Bush, the moderator said, "Now, now, Vice-President. You have to stop. You're violating the rules."

MODERATOR: Both of you have now violated, excuse me. Both of you have now violated your own rules. Hold that thought.

GORE: I've been trying so hard not to.

MODERATOR: I know, I know. But under your all's rules you are not allowed to ask each other a question. I let you do it a moment ago.

BUSH: Twice.

MODERATOR: Now you just… twice, sorry.

GORE: That's an interruption, by the way.

MODERATOR: That's an interruption, okay. But anyhow, you just did it so now…

BUSH: I'm sorry. I apologize, Mr. Vice President.

MODERATOR: You aren't allowed to do that either, see?

FARAH: I thought this was outrageous. This is a debate. This is not a little conversation going on in a living room. This is a debate. We're supposed to have the candidates talking to each other.

These aren't gods. These are our public servants. And it's their responsibility to discuss something in front of each other.

MOYERS: So, what happens if there's a moment of spontaneous debate?

GORE: Affirmative action doesn't mean quotas. Are you for it without quotas?

BUSH: I may not be for your version, Mr. Vice President, but I'm for what I just described to the lady. She heard my answer.

GORE: Are you for what the Supreme Court says is a constitutional way of having affirmative action?

MODERATOR: Let's go on to another…

GORE: I think that speaks for itself.

BUSH: No, it doesn't speak for itself, Mr. Vice President, it speaks for the fact that there are certain rules in this that we all agree to, but evidently rules don't mean anything.

MOYERS: Do you think the people watching knew that the rules had been written by the two parties?

FARAH: Oh, of course not. They had no idea. They thought the Commission on Presidential Debates, whose name sounds like a government commission, it sounds like a lovely agency that was commissioned or chartered by Congress. They thought this: organizations had decided that these rules best served the public interest. They had no idea that behind closed doors leading negotiators hand-picked by the candidates were determining that the candidates could not even ask themselves questions.

MOYERS: The Commission is in fact a private corporation, founded by the then chairmen of the Republican and Democratic national parties. They're still running the show.

FARAH: Every four years, the Commission on Presidential Debate publishes candidate selection criteria and proposes debate formats in order to comply with federal election law.

But questions concerning debate format and debate schedule are ultimately resolved behind closed doors between negotiators for the Republican and Democratic nominees.

MOYERS: That wasn't the case in the beginning. The first televised presidential debates, between Kennedy and Nixon in 1960, were sponsored by the networks.

President Lyndon Johnson refused to debate his opponent, Barry Goldwater, in 1964 and the next debate didn't occur until 1976. By then, the nonpartisan League of Women Voters had become the sponsor.

MOYERS: In the interest of full disclosure I have to acknowledge that I was a moderator in 1980 I think, probably before you were born. At that time, the debates were under the auspices of the League of Women Voters. And I have to say thanks to the League, this sort of thing was not happening.

FARAH: The League of Women Voters was a genuinely nonpartisan organization that fought on behalf of the American people. It took its role as a sponsor seriously. In 1980, when John B. Anderson bolted the Republican Party to run as an Independent for the Presidency of the United States, the League decided to invite John Anderson to participate in the Presidential debate.

MOYERS: Republican John Anderson had served in Congress for almost 20 years before becoming an independent candidate for President.

FARAH: President Jimmy Carter at the time refused to debate Anderson because he thought Anderson would take more votes away from him. So the League was confronted with a dilemma. Does it capitulate to the President of the United States? Or does it invite an Independent candidate the American people want to see.
Well, the League had guts and it went forward and it invited Anderson to participate in a 1980 Presidential debate even though President Carter refused to show up in front of 50 million viewers.

MOYERS: In 1984, four years later, the League had to stand up once again to intimidation from the major party candidates. Ronald Reagan and Walter Mondale kept vetoing every journalist the League proposed as a questioner.

FARAH: The campaigns got together and tried to get rid of all the difficult questions. What did the League do? Well, instead of silently accepting this reality it held a press conference in Washington. And it lambasted the candidates for, quote, "totally abusing the process."

MOYERS: Moderator Barbara Walters was left without a full panel of journalists.

WALTERS: The candidates were given a list of almost 100 qualified journalists from all the media and could agree on only these three fine journalists. As moderator and on behalf of my fellow journalists, I very much regret as does the League of Women Voters, that this situation has occurred.

MOYERS: So there came this moment when these uppity women at the League of Women Voters said to the Presidential candidates, "You can't write the rules." And the two parties then did what?

FARAH: The parties were sick and tired of a women's organization telling their boys who they had to participate with, in what format, with whom, and what questions would have to be asked.

MOYERS: So the two parties got together.

FARAH: Michael Dukakis and George H.W. Bush negotiated the first Memoranda of Understanding in 1988. So they hand it to the League.

The League says, "What is this? We don't do this. We don't put our respected name and trusted name onto a secret document you've negotiated. We refuse to implement this."

NEUMAN: The League of Women Voters is announcing today that we have no intention of becoming an accessory to the hoodwinking of the American public. Under these circumstances, the League is withdrawing its sponsorship of the presidential debates.

FARAH: It's precisely because the League of Women Voters was willing to fight on behalf of the public interest and refused to comply with the secret demands of the Republican and Democratic nominees, that the parties got together and created their own compliant commission.

MOYERS: And that's how the Commission on Presidential Debates came into being. It has supervised every presidential debate since 1988.

But not until the publication of George Farah's book this year had anyone but a handful of insiders seen the secret contracts for the last three debates, negotiated between the candidates and then handed to the debate commission.

Those contracts were leaked to Farah.

MOYERS: This is one of those Memorandum of Understanding that you got.

FARAH: Yes.

MOYERS: This is the 1996… the "agreement," it calls itself. Describe this to me.

FARAH: It's a binding contract.

And this contract dictates who will participate, who will ask the questions, the heights of the podiums, every detail conceivable.

It's a glorified bipartisan press conference. They get a question from a moderator that they selected and they can predict… they've memorized the response to. They issue a memorized sound bite which fits a very nice perfect 90-second response slot that has been stipulated in the contract.

Their opponent cannot challenge their answer because they're prohibited by the contract. The moderator can't challenge their answer because they can't ask follow-up questions.

Imagine for a moment if we could have a debate in which the candidates actually responded to each other. That's what a debate is. Person A makes a statement. Person B responds to the statement.

MOYERS: Dictionary, Webster I think, calls it a contentious exchange between two parties.

FARAH: A contentious exchange. Well, I haven't seen a contentious exchange in 17 years since the Commission of Presidential Debates has hosted these forums because the candidates can't even communicate. This is not a confrontation. And the American people sitting back at home don't know why these candidates can't communicate with each other. Don't know why they're just reciting the same memorized sound bites that they're reciting in their 30-second ads. And they're turning off their television sets.

MOYERS: Something else the public didn't know: the secret contracts gave the Republican and Democratic candidates veto power over other participants.

In 1992, the Republicans believed candidate Ross Perot would hurt Bill Clinton's chances and the Democrats didn't want to alienate Perot supporters, so the two parties invited the feisty Texan to take part in the debates.

PEROT: Now, all these fellows with thousand-dollar suits and alligator shoes running up and down the halls of Congress that make policy now, the lobbyists, the PAC guys, the foreign lobbyists, and what-have-you, they'll be over there in the Smithsonian, you know because we're going to get rid of them.

MOYERS: But four years later, in 1996, neither side wanted Perot there.

FARAH: 1996 is a wonderful example of what happens when the candidates control the Presidential debate process. Bill Clinton, who was the Democratic nominee, and Bob Dole, who was the Republican nominee, hatched a secret agreement to exclude Ross Perot from the Presidential debates. Bob Dole desperately wanted Perot excluded because he thought that Perot would take more votes away from him. And Clinton wanted what George Stephanopolous called a non-event. The smallest possible audience because he was virtually 20 points in the poll and didn't want anything to shake up the race. So they hatched a secret agreement.

MOYERS: That secret agreement specifically spelled out only Bill Clinton and Bob Dole would debate. So Ross Perot was left out in the cold.

Four years later, in 2000, the Republican and Democratic candidates kept Pat Buchanan out of the debates too, although he had qualified for more than 12 million dollars in public financing.

Ralph Nader, who had made it onto the ballots in 43 states and the District of Columbia, was not only kept out of the debates but was prevented from getting into a debate site even though he showed up with a credential.

NADER: We all have the same so-called badge. Everyone got in but me.

MOYERS: Wouldn't including not just Nader and Pat Buchanan but the Libertarian candidate and other third parties that might arise, wouldn't that lead to a kind of chaos in our political system, a kind of anarchy?

FARAH: Well, that's what the Commission on Presidential Debates would like the American people to believe. They claim that hundreds of candidates run for office every year. And they're right.

Hundreds do run like Billy Joe Clegg of the Clegg Won't Pull Your Leg Party and Jeff Costa of the Crustacean Liberation Party whose entire platform is committed to the liberation of crabs and lobsters from our nation's oceans and seas.

MOYERS: Farah says you don't have to open the doors to just anybody. There are ways to include viable, legitimate third-party candidates. And democracy is served when we do.

FARAH: Third-party candidates don't regularly win federal elections. They don't. But they raise critical issues that the major parties eventually co-opt.

Third parties are responsible for the abolition of slavery, women's suffrage, public power, public education, social security, unemployment compensation, the direct election of senators, the formation of labor unions. The list goes on and on. And these candidates before Presidential debates were ever established raised these issues in public forums.

Millions of Americans listened to their ideas, read about them in newspapers, heard about them on the radio. And it forced the Republican and Democratic parties to co-opt these issues and integrate them into law. Now the American people never get to hear about an issue and the third-party candidate cannot break the bipartisan conspiracy of silence on critical issues the American people care about.

MOYERS: That happened when Ross Perot was excluded from the '96 presidential debates. But he had the money to fight back with ads of his own.

1996 PEROT INFOMERCIAL: 76% of Americans want Ross Perot in tonight's debate. The Republicans and Democrats are desperate to keep Ross out. But why? Maybe it's because the eleven big companies that fund the debate commission pump millions into forcing NAFTA through congress and are giving millions more to the Democrats and Republicans. That trade deal has cost more than half a million American jobs.

MOYERS: In the first three debates in 2000, you never heard the word corporation mentioned?

FARAH: Never, not once.

MOYERS: There was no reference to the World Trade Organization, to free trade or to labor.

FARAH: When you have two parties who receive 80% of their contributions from business interests excluding other voices who are critical of corporate power, and excluding moderators and panelists who might question them sharply on their relationship with corporate power, you end up with a Presidential debate that entirely excludes possibly the most important or one of the most important issues confronting the American people. That is growing corporate power and how it undermines our democratic process and economic system.

MOYERS: You have a chart in your book on page 13. I suspect that most of my viewers and most of the people who will be watching the debates in a couple of weeks don't know this. That the national sponsors of the Commission on Presidential Debates include, 1992: AT&T, Atlantic Richfield, Dun & Bradstreet, Ford Motor Company, Hallmark, IBM, J.P. Morgan, Philip Morris, Prudential. 1996: Anheuser Busch, Dun & Bradstreet, Lucent Technologies, Philip Morris, Sara Lee, Sprint. In 2000, Anheuser Busch, US Airways, 3Com.

You say that this results in the debates becoming corporate carnivals.

FARAH: Yes. If you attend a debate site what you see are huge Anheuser Busch tents. Anheuser Busch girls in skimpy outfits and they're passing out beer and they're passing out pamphlets that denounce beer taxes. You have giant posters of the various corporate sponsors also passing out other materials that are promoting their goods, their products and their political issues.

MOYERS: The public at home never sees this.

FARAH: Oh, they never see this. These are the corporations who are primarily paying for the debates that tens of millions of Americans are watching. And they get to bring their clients to debate sites, entertain them. They bring them to a nice suite. And they take them to the debates and sit in the front rows of these presidential debate forums. They get tax deductions for their major contributions to the Commission on Presidential Debates.

And when I asked Frank Farenkopf, co-chair of the Commission on Presidential Debates, whether he thought it was okay for beer and tobacco companies to be hosting and sponsoring these presidential debates, he said, "Boy, you are talking to the wrong guy. I'm a lobbyist for the gambling industry."

MOYERS: George Farah says there is an alternative to partisan control of debates sponsored by corporations and run by lobbyists: a Citizens' Debate Commission. He spells it all out in the book and a lot of people have already signed on.

MOYERS: Why do you care about this so much?

FARAH: Because this is a democracy. And we have to fight on behalf of our democratic process. Our democratic process is at stake.

Your viewers have power. These are political candidates that are fighting desperately for their votes. They can demand of these candidates that they want real debates.

This is the most important country in the world. And we need to have an authentic debate so the American people can choose the most powerful human being in the world.

MOYERS: You can find out a lot more about George Farah and Open Debates by going to the NOW page at pbs.org. You'll see that they and other reform advocates are claiming some modest success this week.

For the first time in 16 years the contract between the two campaigns  the memorandum of understanding  has been made public. This is a copy of it. We'll post it on our Web site. And for the first time in 12 years there will be more than one moderator, the Commission, not the candidates, has chosen them. Even so, the Commission is insisting those moderators sign the agreement, to make sure no sudden journalistic urge violates the boundaries set by the candidates.

Meanwhile, a federal judge has called for an investigation into whether the Commission acted in a partisan manner when it refused to allow any third-party candidates to attend the 2000 debates. And this week the President of the National Urban League accused the Commission of organizing the debates to keep urban and civil rights issues off the agenda. So here we go again, with what David called those debatable debates controlled by what amounts to a political cartel.

BRANCACCIO: There's more to come on NOW. The next President, whoever he is, will face tough economic issues like the loss of jobs and runaway government spending. Now an urgent call from a lifelong Republican to put our financial house in order before it's too late.

PETERSON: There are an awful lot of people out there that in their gut are quietly concerned.

BRANCACCIO: Our next guests have signed no memorandum of understanding, have agreed to no rules, and are not likely to stay on message. Michel Martin is a correspondent with ABC News and a regular analyst on this program. John Powers is a columnist and the deputy editor of the LA Weekly. He's written a new book. It's called, SORE WINNERS, a guided tour of what he calls George Bush's America. Welcome to NOW.

POWERS: Hello.

MARTIN: Thanks for having us.

BRANCACCIO: So, Michel, the Presidential debates are like some kind of Super Bowl. Only the fans haven't been told that the two teams have agreed no tackling, no meanness. Finally, some civility in politics?

MARTIN: I don't know if it's that. I mean, it's just the ever-increasing desire on the part of the political parties to wipe out any spontaneity or anything that could threaten, you know, their candidates. Really I think what we're doing is letting the public in on a lot of the way modern politics is conducted. I think it's important that people know that. But let me just say, these debates still matter.

BRANCACCIO: You're still gonna watch?

MARTIN: Absolutely, I'm gonna watch. Because this is… and I would hope that other people would watch. Because this is a campaign where the lead has changed several times over the course of the year. We know that interest is high. But I don't think that just the fact that people are showing a lot of interest in the campaign necessarily translates in a commitment to vote.

And so, this is, I think, and also for the Kerry campaign, particularly important. This is their one chance to change the dynamic in their favor before Election Day. So, I think it's still important, you know. How it's paid for is important, how it's set up is important, but what they say still matters.

BRANCACCIO: John, you're gonna watch. You follow pop culture. Is there a chance, even with this system, that there'll be something groovy that will live in the pop culture after these debates?

POWERS: And in fact, it's like… it's one of those peculiar things, that the only thing that people really care about in debates often will be the one unscripted-seeming moment, or the moment that has some spontaneity or life to it. That's why, you know, the sound bite is often a joke that somebody makes, rather than some sort of policy statement.

The people here are crafting their personas. And in fact, it's kind of like a Hollywood movie in some sense. You're seeing the trailer for the movie with these debates.

MARTIN: You know, can I just say this? Spontaneity is overrated.

POWERS: Yeah?

MARTIN: I mean, it really is. From the standpoint of performance, sure, it makes it more interesting to watch. But what we really care about is, what do these people really say they're going to do? Are they really gonna do it?

And what tools do we have to evaluate their character? And since most of us don't get a chance to sit down and, you know, have dinner with these people, this is our one chance to really hear what they have to say.

BRANCACCIO: You think anybody watching though is actually gonna believe the words coming from the candidate's mouth is some sort of promise that'll be carried out once in office?

MARTIN: Well, the issues do change though, don't they? I mean, who among us anticipated in covering the 2000 election that the abiding question of this campaign would be about all the issues flowing from September 11th? The issues do change. So, I think it is fair to ask people if you really, you know, gut checked. Do you really… does this guy seem to be level? Does he seem to be telling you straight? What does he say he's going to do? And I don't think that's crazy.

POWERS: But I think what's curious is often the person who comes across better is the one who seems more authentic. You know, I always have that sense that anybody who can seem authentic for ten minutes in the campaign often wins.

You know, and what will happen here is that you'll have two guys trying to craft their personal myth. And the question is, whose myth actually seems like a human being's myth, and whose myth doesn't seem like a human being's myth?

BRANCACCIO: And John Kerry's not very good at those authentic-seeming moments. The President's actually better at it.

POWERS: Oh, much better. You know, I think that's the interesting thing about Bush is, he's actually really great at it. You know, that the whole idea that he's dumb in fact, you know, completely missed the point.
Because in fact, he seems like a relaxed, normal human being. Whereas Kerry's stuck with a rhetorical style that I think is 50 years old. You know, I mean, he really sounds like he's there giving a speech. But this is the TV age and Bush is a TV-age President. He actually talks. And that's a huge difference in terms of being authentic.

MARTIN: And if you look at the polls, you can see where each guy is gaining and each guy is losing. I mean, Kerry is actually winning on issues. If you look at where the public is and where Kerry says he is on the issues, the public is with him. I mean, if you ask people whether they feel that, you know, the public is divided on Iraq. Do they think that this war was worth fighting or not? The public is closely divided.

But if you ask people if the casualties are too great at this point, they think it is. They are doubtful about whether the resources being extended are worth the outcome in the end, and so forth. But if we ask them on attributes, and this is something that the President and his advisors have worked on for months and hammered relentlessly actually, is he a leader? Is he honest? Is he a straight shooter? Does he tell the truth? Does he lead by his convictions? Does he care about people like you?

On most of those indices, the President is winning, and partly because of his own attributes. Partly because they have hammered relentlessly at Kerry, at letting people think that he's just not fit to be commander-in-chief, he's not fit to run.

BRANCACCIO: The President must be good at this. He went to the United Nations this week and gave his assessment of the situation in Iraq. And frankly, it was fairly upbeat. That ultimately, the message from the President was that Iraq is on track. It was weird. It was like the movie THE MATRIX where the President had taken the red pill and John Kerry had taken the blue pill.

John Kerry comes out with the basic same set of facts and came up with a very different picture. Yet, one of those images, the President's optimistic one, seems to have taken hold in the public debate.

POWERS: Well, it's actually a peculiar thing, because you actually have a debate at some level, between a mythology on the one side and I guess the facts on the other. So, they don't ever seem to mesh. The mythology is that Bush is the rock of Gibraltar, that he stays the course. He's solid. You can trust him.

And when Bush talks, he doesn't talk about the details of Iraq. Name the last time you actually heard him come out and say, "Well yes, 46 people were blown up today."

He never gets that specific. It's always a big picture thing. And he's solid. The way that Kerry should make the argument is that the very qualities that Bush is celebrating himself lead you to the disastrous realities, is what, you know, so that of course he's a strong powerful leader. Yes. But if the strong, powerful leader is driving 70 miles an hour on a winding road, that's not a good thing.

MARTIN: But that in fact, is supposed to be his argument from now through Election Day. His argument from now through Election Day is supposed to be that Iraq is the prism through which you must judge the Bush presidency.

BRANCACCIO: Yeah, not the economy anymore.

MARTIN: Well, the argument is that that is the prism through which all these decisions… he may mean well but he is wrong on the substance.

And that once he is wrong, he is unable to admit error and commits himself to a failed course and cannot correct course. And that is why he has to be replaced. I mean, that is the essence of the Kerry argument.

BRANCACCIO: Sure, it's also a macho campaign. Remember a couple years ago, they were talking about the feminization of politics where candidates had to get in touch with their feminine side? And these days, I see John Kerry posing with firearms a lot. The world has changed.

POWERS: Well, we now… I think we're back to an idea of the protective male after September 11th. You know, that the key idea when you read about it, is lots of women voters who are, you know, often wooed dramatically through the feminization of politics, now want to feel they're safe from terror. So clearly, both guys are out there trying to prove that they're the guy who will keep your children safe.

BRANCACCIO: And there's a CBS News/NEW YORK TIMES poll that shows Bush surging ahead of Kerry among women in the last month based in part on this.

MARTIN: Well, you know, I think that President Bush, should he win this election, should send his wife a really big bouquet of flowers and buy her some extra rocks is that's what she likes. Because I think he owes her a great debt of gratitude. I think that Laura Bush had been one of the most effective political surrogates that he has. I think that she has worked very effectively to blunt charges against him, charges of sort of his character.

And she is certainly very effective, in part because she is certainly not held to the same standard of questioning that other surrogates would be. For example, that she has been used to kind of vouch for his service at a time when she… his military service, which is an issue that's surfaced in the campaign. And she would have no way of knowing other than his word on the matter. But certainly, no one's going to go to her and say, "Well, how would you know? You didn't know him back then."

So, I would argue that she has very effectively given this kind of macho, protective gloss, and she's effectively transmuted that into something that women can buy into.

POWERS: Although, it must be said. You know, we were talking about the debates earlier, the way there's a certain unreality to the debates.

There's that peculiar way in which a wife vouching that her husband is actually a nice man can be taken seriously in an election. Because you think like, how many wives are actually gonna come out and say, "Well, actually," you know.

MARTIN: "The guy's a jerk."

POWERS: "The guy's a jerk."

MARTIN: "I can't stand him and we…"

POWERS: So it's strange that the wife's testimony, which, you know, which people would scoff at in any kind of court case, you know, in the election, all of a sudden becomes a big deal.

BRANCACCIO: Now, John, you're an equal opportunity offender here. You don't just call the Republicans liars. You call the Democrats weasels. The book is called SORE WINNERS. I mean, what's that about?

POWERS: Well actually, what was striking to me is that we live in a moment where even the people who are triumphing seem angry all the time. It's one of those weird ways that the Republican Party at the moment, which now controls the Presidency, the Supreme Court, and the Congress, still seems aggrieved as if somehow, the liberals are running the world.

And they're running angry all the time. So, they actually are sore. You know, they're grouchy and complain like the world is treating them badly. Saying, "No, you've got it made. You're winning everything."

BRANCACCIO: You know, I know a family that has two BMWs in front of their house. But they walk around hacked off because they feel somehow oppressed by the system. They're Republicans but they feel that somehow the system is still doing them wrong.

MARTIN: But you know, that's the question I'd like to ask John. Because you've talked about the polarization…

POWERS: Right.

MARTIN: Of the populace and what I'm curious about… And you've also talked about the ways in which you think the President exploits it. What I'd like to know is do you think that he's leading or is he following? And is he following some kind of affluent angst that just exists organically for some reason?

POWERS: He, the President?

MARTIN: The President.

POWERS: Right…

MARTIN: That he's just exploiting that or do you think he's fomented that by his own rhetoric and actions.

POWERS: I think probably both. I think there is a weird affluent angst that is out and about. I think the people who have a lot these days, often feel that they could have more. And therefore they're bitter about it. At the same time, I think the White House has been very very good at exploiting that feeling.

Of suggesting that there is this liberal elite out here that somehow wants to lead the country astray. And in fact the White House is on your side. Because even though they would seem to be linked to the powerful economic forces, in fact culturally, they're like you.

You can even see that in the way it plays out with the persona of Bush and Kerry. Kerry's the wind surfing guy. You know, which is in elitist terms about as elite as you can get. You know, Bush is the guy who at least pretends to like cutting brush.

BRANCACCIO: Time is running out. There's only a few weeks till this election. And here, play a game with me. I don't know if you ever played Tetris, little computer game back in the 80s, when the computers were slow. This is our own version of it. You can do this on many Web sites.

We happened to go to the LOS ANGELES TIMES Web site. And take a look at this little game where you can try to forecast the presidential election. Take a look at this map: red states for Bush, blue states for Kerry. I gave North Carolina to the Republicans despite John Edwards. You gave a bunch of Midwest states, lots of Midwest states to John Kerry, I don't know why. New Mexico. And look what happens. Kerry still hasn't won yet without Florida.

It really is clear that, Florida is crucially important to John Kerry. Perhaps it is possible that President Bush doesn't need Florida to actually pull this off.

POWERS: It is possible. I mean, I do think it's incredibly volatile still. I mean, I think that one of the most interesting things in the psyche of this election is the way that about three weeks ago... everybody I knew who is for Kerry hated him. They just thought he'd blown it. I can't believe I backed this guy, he's a bum. In the last week, I felt that turning around.

Partly they liked the speech he gave about foreign policy this week. But they can also feel there still is some room, he seems to be sharpening up. And what's interesting is I think that over the next month things can change. The debates can actually matter if Kerry seems better.

He seemed to be knocked back almost I think his campaign was stupid in thinking that the Bush people weren't going to pound him at the convention. They should have been pounding Bush because they should be making Bush defend his record rather than making Kerry defend some imaginary record, you know, that he couldn't possibly have.

MARTIN: Plus, he had a very complicated record.

POWERS: It is.

MARTIN: I mean that's the problem with running as a Senator with a 20 year record.

POWERS: Yeah.

MARTIN: You'd have taken hundreds, thousands of votes, all of which can come back to haunt you. Any one of which can come back to haunt you. Even something that seemed perfectly reasonable at the time, some procedural thing that you voted for, to clear the way for something else then becomes…

BRANCACCIO: But in the other candidates hands he could have perhaps, turn that same kind of scrutiny on the President.

MARTIN: Oh you know, but that's his job. I mean his job is to make this a referendum on the President's performance. He had two things to do. He had to meet a threshold of credibility. Can I run this country? Do I have the skills and the temperament to run this country? So he had to meet sort of a threshold of credibility. Nobody knows what that is.

And the second thing he had to do was make this a referendum about the President.

BRANCACCIO: And in a nut, John, it's a referendum on Iraq, according to Kerry.

POWERS: Yes, you know, it's a very bizarre thing. I mean you know that Iraq seems to be going badly in factual terms. But at least the news reports look bad. The remarkable thing about the Bush campaign is the way that it simultaneously managed to take Kerry's strength, his war record, and actually turn that into a liability on the one hand.

And take what looks like Bush's weakness, the war in Iraq and actually by sort of brazening it through, turned that into a triumph. Even when it's going badly, I'm the guy who will fight it through. We'll win. I'm optimistic, I'm courageous. So don't worry about the temporary effect that it's going badly.

In the long run, it will go well, you're with a guy you can trust because I stick with what I believe. Now that takes a lot of courage to actually to not sort of weasel back a little bit. Or say, you know, things aren't going so well, blah blah blah. But they never do do that.

BRANCACCIO: Michel, it's getting late in the day here. November 2nd is really around the corner. Is there a chance for some new issue to galvanize this campaign?

MARTIN: Well, you know, this has been a volatile race all along. I think the lead has changed several times. And there was also the possibility of external effects affecting the outcome. As happened in Spain with the train bombings there. In fact, I think you will see the Bush campaign trying to inoculate their candidate against that by walking right up to the line, I think, of appropriate political discourse. By suggesting particularly through, you know, the vice president and the Speaker of the House that, you know, John Kerry is the candidate preferred by the terrorists.

POWERS: You know, Dick Cheney says, well, you know, really essentially if you elect John Kerry you're more likely to get attacked. The Kerry/Edwards campaign says that's completely inappropriate, you shouldn't say that.

In fact, the underlying message of that is that you don't strike back. Which if you're arguing about terrorism, what people probably want to hear you say is I ought to knock his block off, is what they should say. And that the Kerry symbolism should be, you attack me, I will smack you back. Because that's exactly what Bush does.

And when you're fighting a war on terrorism, what people want in the leader is the sense somehow if they mess with you or mess with the American people, you're gonna smack back. A lot of the Kerry/Edwards rhetoric is to say it's completely inappropriate. Why don't they withdraw that comment? Actually that symbolizes weakness in a weird kind of way.

MARTIN: And it's funny too, because remember when Bob Dole actually criticized John Kerry's purple hearts. He suggested that perhaps he had not earned them, that he hadn't really been that seriously wounded.

BRANCACCIO: He was sort of warming to the swift boat folks.

MARTIN: He was warming to the swift boat and John Kerry called him personally and said, hey… And I don't, though I certainly wasn't privy to their conversation. But that is the kind of thing one would think a man whose honor had been attacked would do in that situation.

POWERS: Yes.

MARTIN: So it's curious that he could do that on a sort of interpersonal level. And doesn't seem to be yet capable of doing it on a larger sort of performance aspect. But I have to say that Kerry has as a reputation of a very strong closer. At least he has in his Senate races. It'll be interesting to see whether he is in this case, too.

BRANCACCIO: Next week on NOW, a look at how the Bush administration wants to fast track the extraction of oil and gas from pristine landscapes including this one in Montana.

SENTZ: There are some places on earth that even if there's solid gold beneath them they oughta be left just like they are.

BRANCACCIO: The fight for one of the last great wildernesses in the lower 48. Next week on NOW.

BRANCACCIO: Finally tonight, those tax cuts. Just in time for the elections, Republicans and Democrats worked last night to pass an extension of the Bush tax cuts.

Oh, and they added a sweetener: an extra 13 billion dollars of new tax breaks for business. Of course there was the taboo subject, excuse me for mentioning it, about how to curb spending to pay for all of this.

But here's a reality check: the Congressional Budget Office says the national deficit will hit an all time high of 422 billion dollars by the end of this month. That's 2.3 trillion, with a t, over the next 10 years.

And then there's the cost of the war.

Reuters reports we're now pumping a billion dollars a week into Iraq. Now, both candidates say they will cut the federal deficit in half in the next 4 or 5 years.

Promises like those leave Peter Peterson shaking his head. Yes, he's the former chairman of the Federal Reserve Bank of New York, a former commerce secretary under Nixon, and now heads his own investment firm, the Blackstone Group.

But he's a bit of a boardroom radical, a Republican rebel. 12 years ago he helped found the Concord Coalition, which sounds the alarm about government red ink.

He's just written a new bestseller: RUNNING ON EMPTY: HOW THE DEMOCRATIC AND REPUBLICAN PARTIES ARE BANKRUPTING OUR FUTURE AND WHAT AMERICANS CAN DO ABOUT IT.

Pete Peterson, welcome to NOW.

PETERSON: Thank you, sir.

BRANCACCIO: So they cut taxes again the other night. $146 billion it works out to be over five years. They don't even mention how they're gonna pay for it. And both Republicans and Democrats are looking pleased, relaxed and perfectly happy.

PETERSON: That's a correct analysis.

BRANCACCIO: Does that cheer you up? What are they missing?

PETERSON: Well, let me offend both parties relentlessly on an equal opportunity basis. We have the damnedest kind of unholy conspiracy of both of them which ends up slipping the check, a huge check, for our free lunch to our own kids and grandkids. So at bottom I find this a moral issue.

BRANCACCIO: It's a moral issue?

PETERSON: Yeah, it's a moral issue. The German theologian Bonhoeffer said, "The ultimate test of a moral society is the kind of world it leaves to its children." Now we're leaving our kids unthinkable taxes and debts and so forth.

And it's as though we've morphed into a world of all gain and no pain, and all get and no give. And it's politically incorrect for anybody to give up anything for the general good. And what's really important: win at any cost. Win elections at any cost.

You can never tell the American people they have to give up anything or anybody has to sacrifice. So here we sit in the middle of two wars with 77 million boomers about to retire, a war in Iraq, a homeland security needs that are being almost totally unaddressed. And we're pretending as though we can fight two wars without a war budget. We're pretending as though there's huge elephants in the room. What are they? One is the entitlement elephant. You know, Social Security and Medicare.

BRANCACCIO: Uh-huh.

PETERSON: And the other is a new one: the twin deficit. Which is the amount of money we have to borrow from foreigners to finance the brute fact that America is spending much more than it's producing. And we have to borrow the rest. And we…

BRANCACCIO: And if foreigners are financing…

PETERSON: They are financing our consumption.

BRANCACCIO: The thing is the foreigners might some day, for whatever reason, change their mind.

PETERSON: Well, this is…

BRANCACCIO: Take the money.

PETERSON: I wonder if it might occur to us at some point that they might wake up some day, and even if they have confidence in the way we're managing our affairs and wanna let us borrow this money, they might need it themselves.

BRANCACCIO: You don't have to be a financial expert reading the fine print in the paper. If this crisis happened, if, God forbid, the foreigners took their money and…

PETERSON: God forbid.

BRANCACCIO: This is something that would affect American families.

PETERSON: Well, it'd affect us in the following ways. The dollar falls suddenly. Interest rates go up in a big spike. It has very damaging effects on the financial markets, on the economy and might I add on mortgage rates and on and on.

And this is a very serious problem. The economy slows down and so forth. So our country has some fundamental adjustments to make, as does the rest of the world.

BRANCACCIO: You talk about this conspiracy between the parties to ignore…

PETERSON: Implicit.

BRANCACCIO: …issues like this. Implicit.

PETERSON: Implicit.

BRANCACCIO: But, you know, there's something seductive about this conspiracy. I love this alternate universe where deficits don't matter.

PETERSON: Well, sure…

BRANCACCIO: I mean, you pull out the credit card.

PETERSON: Yeah.

BRANCACCIO: And in this great universe that we've constructed…

BRANCACCIO: You and I could run up some serious bills on this credit card. We don't have to pay.

PETERSON: Let's talk about the federal government. The unfunded liabilities, it means obligations we've made for which we have not set aside the funds. And please don't tell me the trust fund is real. It's an oxymoron. It's…

Now the entire net worth of America, the entire net worth, is $42 trillion. So that's the debt that we're passing on to our kids.

BRANCACCIO: A moral question, clearly. But, frankly, it's also a political question. You and I are not running for anything. And the voters will cut the throat of any Republican or Democrat who starts talking about the fact that we need to think about the future, that we need to conserve, now austerity is the way to go. How do we solve that?

PETERSON: You're never gonna have an honest discussion of this problem in a political election. Why? I was brought up in Nebraska and there used to be the pheasant shoot or the turkey shoot phenomenon.

And the poor turkey that lifted its head got shot off. Well, anybody that makes a reform suggestion that involves somebody giving up something in a political campaign, the other side will shoot their head off. You know, "You cruel, inhumane individual suggesting we give up something."

So my scenario is the following. I would hope that the next President will realize that this country needs a massive dose of truth-telling.

How do you get that truth-telling out? I have been very impressed with the 9/11 Commission. I take you to before the 9/11 Commission. Were we really seriously talking about reforming intelligence? Now we're falling all over each other as to who can do it first because a group of very distinguished Americans transcended the usual special interests, and they unanimously told the truth. I would want the next President to immediately upon being elected appoint the highest quality commission on the twin deficits and composed of people who transcend partisan interests or special interests.

I'd give them a pretty tight deadline. And I'd say, "I want you to come back and speak the truth about the magnitude of the future problems and tell us what we think we should do." The President himself is gonna have to take bold leadership. There is no way this problem will be solved without the President taking leadership.

BRANCACCIO: A lot of talk about what is the state of the economy going into the election? And we look at, for instance, the index of leading economic indicators came out the other day for August. Down a bit. Today durable goods orders come down a little bit. This is the type of short term information that we really need to look past, I think…

PETERSON: Precisely.

BRANCACCIO: When someone says, Pete, how is the economy doing?

PETERSON: Yeah.

BRANCACCIO: You have to look to these other indices, the longer term.

PETERSON: We suffer from an acute case of short termitis in this country. And I'm not talking about what's going to happen in the next six months. My God, if you can't grow with a $450 billion dollar deficit, with huge tax cuts, with 1.5 percent interest rates, when are you going to grow? So I'm not talking about the short term. I'm talking about what happens a few years from now. And I don't know the serious person that isn't very concerned about that.

BRANCACCIO: Could we see an economy that has sort of a hard landing but short of a crisis? What would it look like Pete?

PETERSON: Well, I'm glad that you mentioned that, because about half of the experts I've talked to think we're taking a substantial risk of the hard landing. The other half think the odds are that we can have a softer landing. But let's be clear about something. It's still a landing. It's not a takeoff. We're… it's not sustainable. Everybody knows that. We are going to have to consume and import less. We are going to have to save more. We are going to have to produce more. And the rest of the world is going to have to do just the opposite. So we're in for a period of adjustment. But it could be done more gradually. It could happen more gradually.

BRANCACCIO: Pete, I was over at the Republican convention the other day… it was up the street. And I was talking to Steven Moore of the Club for Growth.

PETERSON: Yes.

BRANCACCIO: Arch-conservative.

PETERSON: Yes.

BRANCACCIO: And his quote, we had it on the air here, was, "God put Republicans on this earth to cut taxes." What would you say to that?

PETERSON: Well, I don't know if God has installed my party, or who has. I had thought this was the party of fiscal responsibility. And I was presumably educated at the University of Chicago by Milton Friedman, great conservative. Milton used to teach us that a long term tax cut is not a tax cut at all if it's not accompanied by long term spending. It's just a deferred tax increase. And on who? On our kids.

And I've debated with Mr. Moore. I said, if you guys are so concerned about a small government, where's your program for reducing spending? Where is your program for reducing the costs of entitlement?

And their implicit agenda was you cut the taxes dramatically, and then we'll have to slash the benefits suddenly. And millions of Americans who depend on these programs will be told, sorry, folks and I find that a totally unacceptable solution.

BRANCACCIO: Do you see anything in the culture as you talk to people, as you walk around, as you read and you watch television, that would lead you to believe that the American public is ready for this idea of thinking about the future?

PETERSON: I want to believe that in their guts, the American people are wise enough to know we're living in a kind of surreal Disneyland world. We're fighting two wars, and I'm old enough to remember the second World War, and I remember the sacrifice. And I wonder if at some level, people in their gut don't understand that this is kind of an economic fiscal Disneyland. And it ain't really true.

BRANCACCIO: The book is called RUNNING ON EMPTY: HOW THE DEMOCRATIC AND REPUBLICAN PARTIES ARE BANKRUPTING OUR FUTURE, AND WHAT AMERICANS CAN DO ABOUT IT. Peter Peterson, thank you very much.

PETERSON: Thank you, sir.

BRANCACCIO: And that is it for NOW. Thanks for joining us.

MOYERS: David and I will be back next week, just 4 weeks and 4 days before the election.

I'm Bill Moyers. Good night.

BRANCACCIO: Connect to NOW at pbs.org.

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